Does the green credit policy reduce the carbon emission intensity of heavily polluting industries? -Evidence from China's industrial sectors.

Green credit policy (GCP) is an important practical exploration to guide green economic development by financial means. Empirically, however, little is known about the relationship between GCP and industrial carbon emissions intensity (CEI). This study aims to investigate the impact of GCP on the CEI of heavily polluting industries (HPIs) by treating Green Credit Guidelines as a quasi-natural experiment. Using Chinese industry-level panel data and a difference-in-difference model, we find that after the implementation of GCP, the CEI of HPIs decreased by an average of 0.267 tons/104 yuan per year compared to non-HPIs. Resource allocation effect and green innovation effect are two channels through which GCP reduces CEI of HPIs. Moreover, the GCP has a greater effect on the CEI of HPIs with lower state-owned ratios, higher total factor productivity and higher capital dependence. These findings provide policy insights for promoting industrial carbon emissions reduction.